Call comes after ministers refused to put target for decarbonising UK power sector into last week’s energy bill
The UK government and the EU should provide clear targets on carbon emissions for 2030, in order to give companies the confidence to invest in green technologies, according to a survey of energy industry chiefs.
Ministers refused to put a target for decarbonising the UK’s power sector by 2030 into last week’s energy bill, despite calls for such a target from major companies, Labour, Liberal Democrat activists and green campaigners. George Osborne, the chancellor, is understood to oppose such a target.
The World Energy Council (WEC), which represents leading energy firms, said targets were needed because companies needed clarity on future policy in order to make the right investments today. “This is what the energy industry wants – they want defined targets,” said Joan MacNaughton, executive chair of policy assessment at WEC. “There should be a defined increase in ambition [on emissions cuts] for 2030, consistent with the trajectory needed [to cut emissions by 80%] by 2050.”
Her response was based on research undertaken by WEC among 40 energy industry executives, who were asked for their views on how the industry and its relations with government, and responsibility for tackling climate change, should be shaped in the future. MacNaughton said there was a clear call from industry leaders for “political action and political leadership”.
Governments are meeting in Doha, Qatar, until next Friday under the auspices of the United Nations, with the aim of hashing out a new global climate change agreement to replace the Kyoto protocol. If successful, the treaty would be drawn up in 2015 and come into force from 2020.
MacNaughton, a former top civil servant in the UK with a focus on energy policy, said the British government had “done very well” by setting out carbon budgets that will govern how far emissions must fall by 2027, because that gave investors some of the clarity on future policy that they need to make investments.
“The key thing is that everyone should have confidence in the stability of the system,” she said. “The industry wants clear, coherent and consistent government policy. That is the very clear message they are giving us.”
Carbon budgets have come under attack, however, from some Tory MPs, and Osborne has ensured that future budgets will come under review before they are accepted.
MacNaughton also said Europe needed to invest in innovation in order to compete with the US, where lower energy prices resulting from the boom in shale gas have brought lower costs for manufacturers. “We ought to be able to grow through investment and innovation – that would position Europe best to compete with the US,” she said.
Funds for research and development in the EU’s budget have come under attack from the French president François Hollande, who would prefer to cut such funds – though they are a minor part of the budget – than to annoy his farmers by agreeing to cuts in the common agricultural policy, which makes up the lion’s share of the EU budget.
The EU has declined so far to commit to specific emissions and energy targets beyond 2020, though the European commission’s energy chief has suggested that discussions should begin soon. Member states have, in aggregate, already met their 2020 target of cutting emissions by 20% compared with 1990 levels – eight years ahead of schedule – according to Sandbag, an environmental pressure group. That leaves the EU in a difficult position to negotiate the next round of international climate negotiations. The UK has been pushing for a tougher 2020 target to cut emissions by 30% as part of the deal, but is unlikely to succeed.
However, there has so far been little sign of progress at Doha, and developing countries have attacked the rich nations for failing to respond to the need to cut emissions drastically, and for not providing the finance that was promised to poor countries, to help them cut their emissions and adapt to the effects of climate change. Within the EU, there are stark differences of opinion on how far and how fast to cut emissions beyond 2020, and other developed countries have yet to come up with proposals on how to manage the process of drafting a new agreement.